A shocking number of people in California who work for giant corporations don't receive a dime of health coverage from their employers. Thankfully, new provisions of the Affordable Care Act, which take effect in January 2014, are designed to help them and the leagues of uninsured in California and across the country. But on the eve of this historic reform, some of our country's biggest corporations are working furiously to avoid providing health coverage the new law requires.
Corporate giants including Walmart and Darden Restaurants, owner of popular chains including the Olive Garden and Red Lobster, quietly are remapping their hiring strategies, cutting employees' hours and slashing wages to avoid their obligations and boost their bottom lines.
The ACA, or Obamacare, requires large employers to offer health insurance to part-time employees working 30 hours a week or more. But many large employers are cutting back employee hours and wages instead of paying their fair share for health care.
It is shameful that companies that enjoy staggering profits will go to such lengths. Rather than offer health insurance to hundreds of thousands of workers, and to avoid paying steep penalties under the new law, these mega-companies are choosing to dump already-underpaid workers onto Medicaid and unload the costs straight onto taxpayers. Perhaps the worst offender is Walmart, whose business model already relies on taxpayers to shoulder the burden of its bottom-of-the-barrel wages. The company pays its employees so little, many qualify for public assistance. Now, to circumvent the new health insurance requirements, Walmart and other low-wage corporate giants are cutting already-paltry hours and pay even lower.
California lawmakers will vote any day on legislation that would protect workers, taxpayers and small businesses and dissuade these huge corporations from skirting the rules. AB 880, by Assemblyman Jimmy Gomez, D-Los Angeles, would make California the first state in the nation to eliminate the "Walmart loophole," requiring large employers who force workers onto taxpayer-backed Medi-Cal, California's version of Medicaid, to pay the costs of that care. The penalties would apply to companies that employ 500 or more workers. Small and mid-sized businesses would be exempt.
Proceeds from the penalty will go into a special fund that can only be used for Medi-Cal, easing burden on taxpayers and increasing access to quality health care for millions of low-income Californians. New research from the University of California, Berkeley, finds that hundreds of thousands of employees from large companies are expected to join the Medi-Cal ranks in the next five years because of the ACA's "Walmart loophole."
By 2019, nearly 400,000 employees of large companies will qualify for the state's taxpayer-funded health program, according to UC Berkeley labor expert Ken Jacobs. Nationwide, some 2.3 million workers are at risk of losing hours under the new healthcare benefit requirements, according to Jacobs.
Walmart made $447 billion in revenue in 2011, even as the Great Recession still was wreaking havoc on the economy. The company's CEO made nearly $21 million last year, almost laughable compared to the $8-an-hour wages paid to his employees.
It's unfair to taxpayers and small businesses that some of the largest, most profitable companies in the world are shifting their costs onto us, while paying executives millions each year.
These corporate profiteers always cry over-regulation and claim that they support Obamacare, but they go to great lengths to avoid paying their fair share. By enacting AB 880, California will lead nation in making sure they can't pass off more costs to taxpayers than they already do. This legislation would protect workers, taxpayers and small businesses by ensuring big companies pay their fair share for health care.
Donny Williams is president of the Kern, Inyo and Mono Central Labor Council. Community Voices is an expanded commentary of 650 to 700 words. The Californian reserves the right to edit all submissions for length and clarity.